Surf and outdoor apparel manufacturer Quiksilver filed for chapter 11 bankruptcy protection on Tuesday.
The California brand rooted in surf, skate and snow apparel, and accessories had been trying to overhaul an organization since 2013, Chief Financial Officer Andrew Bruenjes stated in court papers.
Bruenjes reported that the brand’s downfall came due to a “fragmented” existence with regional brand inconsistencies.
Almost two-thirds of revenue comes from sales outside the U.S., according to court documents.
The Quiksilver brand was founded in Australia in 1969. It launched a women’s apparel line, Roxy, in 1990. Quiksilver also owns DC Shoes, a skateboard shoe brand.
It has some top-notch sponsored athletes, including snowboarder Travis Rice, skier Candide Thovex, surfers Dane Reynolds, Jeremy Flores, and dozens more.
The company is sold worldwide and is a far-flung operation, with offices from Huntington Beach, Calif., to Saint-Jean-de-Luz, France, to Australia.
The brand faced steep financial challenges. In 2009 Moody’s included Quiksilver on its Bottom Rung list of companies most likely to default on its debt.
According to a report in Bloomberg, the chain suffered a 13 percent decline in sales last year, with its net loss of $309.4 million. It listed total debt of $826 million and assets of $337 million in its bankruptcy filing in Wilmington, Delaware.
About $500 million in debt would be cut under the proposed restructuring plan, according to a regulatory filing.
The OC Register reports that, under the plan announced Tuesday, affiliates of Oaktree Capital Management LP will supply the brand with the $175 million infinancing it needs for restructuring. At the conclusion of that process, Oaktree will exchange its debt claim for a majority stake in a reorganized Quiksilver. The plan requires bankruptcy court approval.
European and Asian operations aren’t affected by the bankruptcy.